(Another important reason to choose a respectable broker)
I am treading carefully on this one. Why? It is hard to break tradition anywhere, and if you seek to accomplish such, you must know your audience very well.
Here is the scenario. You (buyers) think you have the perfect formula to come to Costa Rica and locate a property by yourself, or by going direct to a local seller. I have seen this one hundred and thirty six times. It sounds perfectly logical to you, and me.
You arrive and find the people here are so nice, the country stunningly beautiful – it is paradise. So your guard goes down a bit (a lot) as any fear you had dissolves quickly. Ahh, you are in the land of Pura Vida.
You quickly learn that everyone sells real estate, the hotel receptionist, your baggage handler…even your waiter (they hear everything). Everyone knows you as, “the one with cash looking for property.”
You’ve been found. But wait, I thought you found them? Weird how it works.
You latch on to one of these “realtor” (the boat captain) and he tells you that he has a great deal on a home you must see. “Lets go.” It fits all your dreams you had back on your sofa six months ago.
The captain informs you he negotiated the price to $600k. The ocean view is mind-blowing, you can see the islands, it’s only a two-minute drive to the beach and toucans are flying above your head – what a deal.
“I like it”, you say to the captain. Your perfect situation is playing out exactly as you planned. Everyone is smiling, you feel great. You meet the captain’s attorney, complete your purchase agreement, seller signs and you are the proud owner of your fabulous home.
Really? Don’t tell me that just happened!
Coldwell Banker (and other legal brokerages) had that home listed at $539k. Oh yea, you did not use any of us. Sorry about that.
Here is the real deal. The captain knew what the seller would accept, $539K, or negotiate below. He knew you would pay $600k. The difference of $61K is Sobre Precio (also known as Over-Pricing), or the amount the captain just made on that deal as his commission.
Sorry, but you just got hosed!
$61k is an 11.3% commission on the $539 list price – above the listing amount. The seller did not care as they got full price for their home, and had no idea how. But had they know that an additional $61 was left on the table for their risk and equity.. I will stop now.
You got burned – badly. There is no MLS in Costa Rica AND you did not consult with a professional, you just overpaid by $61k. Perhaps you could have paid $500k and saved a cool 100 grand. Or more?
The captain is gone. Maybe he is on his boat and now in a different part of the country. What a great deal for him!
Snooze, you lost.
If you want to get the best representation and price possible in Costa Rica, please call a professional Broker that will work for you, not against you. Please call me!